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Mining can be a major driver of sustainable development, new ICMM report finds

October 27, 2016

Mining can play a vital role on the sustainable development of some of the world’s poorest countries, yet many countries that are most economically dependent on mining would benefit from improved governance according to a new report published by the International Council of Mining and Metals (ICMM).

The report “The Role of mining in national economies” ranks 183 countries according to the relative economic importance of mining. The new data shows the potential contribution mining can play in the sustainable development of many of the world’s poorest countries and also highlights the importance of governance if the economic benefits of mining are to result in broader based economic and social progress.

The report presents a revised version of ICMM’s Mining Contribution Index (MCI) to rank countries. This index combines data on mining’s contribution to countries’ gross domestic product (GDP), export earnings and mineral rents that are paid to host governments. It indicates the importance of mining in the economic life of a country and the potential for this to translate into economic and social progress – although it does not tell us whether this potential has been realized.

The report also looks at other factors that heavily influence whether this potential is realized. These include contributions to government revenues, employment and the role that governance plays in achieving long-term sustainable development. It also shows the importance of the work that leading international mining companies are doing through organizations like ICMM and Extractive Industries Transparency Initiative (EITI) to improve transparent reporting and governance.

Many countries’ dependence on mining has been increasing over the last two decades in spite of the recent decline in metal and mineral prices. The report also looks at how companies have been affected in terms of reductions in market capitalization or exploration spending, and how this in turn might affect countries. It concludes that mining needs to be thought about more systematically as a crucial contributor to host countries’ economic and social development.

The report also includes a guest contribution from the UN Development Program’s (UNDP) Casper Sonesson on the opportunity to re-imagine mining’s role in helping to achieve the UN’s Sustainable Development Goals.

Aidan Davy, ICMM’s chief operating officer said: “Mining’s role in lifting people out of poverty and furthering the sustainable development of host countries has often been overlooked. This report flags a number of countries where mining can play a major role in helping host nations meet their developmental aspirations.”

Casper Sonesson, Policy Adviser at the UN Development Program said: “Mining can play important roles in contributing to sustainable development. It makes critical economic contributions through the government revenues it generates and the linkages it creates with local economies in many countries, as shown in this report.

“In addition, there is great scope in other areas ranging from leveraging mining related infrastructure and water management for local development to minimizing environmental impacts. Going forward, new partnerships and good governance will be essential to fully realize mining’s role in tackling the UN’s Sustainable Development Goals.”